Institutionalization of Green Financing: Mapping the Way Forward in the Indian Context

This essay was adjudged as the second best entry in the Second NLUJ CSBF Essay Writing Competition, 2020-21. The article was submitted by Aabha Dixit and Venkata Supreeth K. The authors are students at Hidayatullah National Law University, Raipur & Gujarat National Law University, Gandhinagar respectively.

Abstract
Given impending ecological damage leading up to a mass extinction event, the need for adoption of sustainable practices has become herculean and all encompassing, with no sector untouched. As a necessary corollary of the projected shortfall in India’s achievement of her Sustainable Development Goals (‘SDGs’) by 2030, the banking sector has an interesting role to play. It must revamp its practices by reducing dependency on carbon-centric projects and consciously internalize social responsibility by financing greener projects. However, a curious concoction of problems comes along with the attempted green transition – logistical challenges such as data insufficiency/underreporting and information asymmetry as well as rise of greenwashing practices. This paper explores the scope of regulatory intervention in light of global green financing policies and actions and examines the practicality of their application in India in relation to involved stakeholders – regulator, lenders and borrower companies. It suggests a bi-pronged approach to promote sustainable financing – by incentivizing adoption of greener business practices coupled with imposition of precautionary liabilities and recovery costs enforced by a financial regulator. The authors argue for the institutionalization of a disclosure mechanism that mandates the furnishing of details pertaining to the environmental impact of business activities coupled with imposition of lenders’ environmental liability. On the other hand, introduction of compliance concessions and switching to greener investment instruments is suggested. This proposed solution seeks to advance the overarching objective of aligning investment decisions in the banking sector with national climate change mitigation goals.

Introduction

India is home to roughly 1/7th of the global world population and is a decisive player for achieving the global target of reduced carbon emissions by 2030 under the 2015 Paris Agreement regime[i]. In order to do so, it must scale its operations to meet the criterion for sustainable development, especially in phasing-out its dependency on fossil-based energy sources towards cleaner alternatives. Estimates project that commissioning of green energy alternatives, their production and distribution and ensuring equitable access is a capital-intensive prospect, which also comes along with its own share of disruption of market forces.[ii] Due to the limited spending capacity of the governments on this front, the bulk of capital expenditure must be augmented from the private sector and primarily from commercial banks. However, green financing of sustainable projects, in the private as well as public sectors, is failing  to compete with non-sustainable or “brown” investments due to their attractive and assured returns in short-run, often at a larger social cost, a negative externality which is not factored in the costs under traditional systems of liability.[iii] It is estimated that over 1.6 to 3.8 trillion US dollars in new climate investment is required for the supply side of the global energy system in the years leading up to 2050.[iv] Conservative estimates show that the India is expected to experience a financial shortfall of around 533 lakh crore rupees (approximately 8.5 trillion US dollars) if it aims to attain the SDGs by 2030, thus equating to an annual shortfall of 35.5 lakh crore rupees (approximately 565 billion US dollars) from 2016 up until 2030.[v]

This paper examines the logistical and practical impediments to the shift towards green financing in context of the Indian banking sector and proposes a bi-pronged solution to address these challenges by combining liability and incentives i.e., establishment of a lenders’ environmental liability enforced by a monetary regulator coupled with introduction of subsidies, concessions and green alternatives to traditional financial instruments.

Analyzing the Indian scenario: Why financing the green transition is fraught with operational obstacles

In absence of a robust, standardized mechanism of disclosures and reporting, lenders are hard-pressed for information on the extent of impact that a certain investment carries. Many studies point to corruption as a major contributor to snowballing the negative economic effects of environmentally degrading business activities.[vi]

Currently, green bonds, akin to ordinary debt securities can be regulated by the Securities and Exchange Board of India (‘SEBI’). Apart from the obligations under SEBI (Issue and Listing of Debt Securities) Regulations, additional requirements have been prescribed for Green Bonds vide a circular[vii] in 2017 wherein issuers are required to make business sustainability disclosures during the offer and on a half-yearly/annual basis.  However due to absence of standardized disclosure requirements, the actionability of the data so reported, or even its quality cannot be ascertained.[viii] 95.2% of the total PSBs have established. Currently, there is no requirement to obtain an independent certification for the processes which require financing from Green debt securities.[ix] Further, SEBI requirements do not apply to off-market transactions, including ordinary banking transactions. 

In India, studies on ESG disclosure regimes have shown that amongst public sector banks (‘PSBs’), 95.2% have an established environment policy, on the other hand only 38.1% PSBs disclosed the quantitative aspects of their purported sustainability activities.[x] On the same count, 52.4% of private sector banks have disclosed any kind of environment policy and only 28.6% of private sector banks have disclosed any quantitative data regarding the same. Establishment of an environmental management system in the banks were quite low among both the PSBs and private sector banks.[xi] Data insufficiency is an endemic problem in emerging and developing countries where poor governance and lenient environmental regulatory system is worsened by corruption influencing the dirty industry’s relocation and thus, results in poor carbon performance.[xii]  

Additionally, increased social awareness about the irreversible and deteriorating environmental consequences of rapid market expansion over the last few decades has led to commercialization of sustainable business practices and products. In an attempt to establish an environmentally responsible brand image, companies falsely report or underreport environmental damages and mislead consumers. Parallel to the market shift towards sustainable development practices and increased consumer preference for environmentally conscious products[xiii], more and more businesses are engaging in sophisticated methods of greenwashing in an attempt to jump onto the environmentally-friendly bandwagon.  Such compromised reporting of data coupled with the high-risk nature of green investments disincentivizes green financing.  

India fares poorly in ensuring compliance from its market actors on the parameter of how vulnerable they are to climate risks. According to Cambridge Institute of Sustainability Leadership’s report of 2018, the study group failed to find “evidence of specific TCFD-compliant initiatives[xiv], thus placing India’s performance on this front on a poor footing compared to other G20 nations.

Establishing a green financing framework in India: Combining profitability with transparency

The impediments to green financing discussed above have made it evident that concern for the planet is an insufficient motivator to affect a significant shift in the market towards sustainable growth. A holistic approach integrating social responsibility with economic viability while providing considerations for all stakeholders – the regulator, the lenders and the borrower companies – is of essence to make green financing practically adaptable in India.  

Need and grounds for regulatory intervention for bolstering green finance

Risk-preparedness of the banking sector is of the primary concern for every financial regulator tasked with the statutory mandate of preserving the stability of the financial system. Implicitly, the central bank in India has a statutory mandate to regulate the monetary policy of an increasingly complex economy.[xv] Due to the physical, transitional and liability risks intrinsically associated with the changing climate pattern, banks are open to exposure in situations where the underlying assets of their investments are stranded i.e., they either depreciate or lose their value altogether.   If the financial sector of an economy is not sufficiently insulated against these risks then the cascading effects threaten to stymie a country’s growth and push its citizens into poverty and unemployment.[xvi]

While arguments do exist in favour of non-intervention, studies posit the chances of market failure if economy is not corrected from heading towards a status-quo model of excessive dependence on carbon-intensive development.[xvii]  Thus, there exists a compelling case for regulatory intervention to protect the stability of financial system.  In most developing countries, financial regulators perform a major function in enforcing sustainability compliances within the market due to the overarching institutional powers enjoyed by them within the financial hierarchy of these nations. Additionally, in such countries, it is only the central monetary regulators that can affect and regulate the private sector economy and boost inculcating sustainable practices across various industries.   The role a financial regulator can play in this regard can range from issuing industry-specific guidelines for responsible banking to even introducing differential reserve requirements to incentivize green investments. Further, the chief activity in this regard can constitute supervision over mandatory disclosures that serves as an information mechanism to all market players regarding the impact of their choices.[xviii]

The Reserve Bank of India (‘RBI’) is the key monetary policy regulator and has a great sway over the investment patterns in the country. The RBI has taken an early attempt to incentivize investments into the green energy sector vide concessional lending and priority lending schemes. Under this scheme, firms engaged in projects involving renewable energy are eligible to avail loans up to 30 Crore rupees. [xix] Financing green projects face obstacles at policy level, due to the grouping of renewable energy projects under the wider umbrella of power projects, which also include conventional power projects based on fossil fuels. In absence of a legislative demarcation of ‘green projects’ from ‘brown projects’, funds that each bank is required to allot to sustainable projects can be legally invested in carbon-intensive projects which ultimately defeat the objective behind prioritizing lending for green projects, i.e., the system will suffer from allocative inefficiency which is structural and investment in projects involving fossil fuels will continue to dwarf green investments. [xx]

Taking cue from global sustainability efforts: The way forward for India

Enacting a mandatory disclosure regulation

Several nations have made inroads into formulating strategic policy signals that have the impact of nudging market forces towards green finance as well as maintaining public confidence in the institutions engaged in it. France for example, has led the way by enacting the Green Energy transition law.[xxi] Enacted in 2015 in the aftermath of the Paris Climate Conference, Article 173 of the new law requires institutional investors to provide ESG disclosures as per a standardized regulatory format as well as explain how their investment decisions are in line with the national objectives of climate change mitigation. Under the Green transition law regime, listed companies are required to provide an overview of the component aspects of sustainability in their respective business activities. The objective of the law is to measure the impact of the business practices, attain a quantifiable basis for measuring the progress towards the SDGs as well as integration of Environmental& Social risk assessment and management frameworks in their internal governance systems. Further, banks and qualified institutional investors are required to make additional disclosures such as scenario analysis which is based on climate stress-testing to measure the exposure levels of their portfolios in the event of climate related disasters, mitigating actions by the government etc. The French approach can be analyzed as a novel attempt at laying down the taxonomy involved in transitioning into a green economy which requires periodic evaluation and certainty in enforcement.[xxii]

In the Indian context, green macro-prudential regulation is the need of the hour to ensure the financial stability and sustainability of the banks themselves. In this regard, intervention may include introducing differential reserve requirements on the basis of a bank’s investment portfolio.[xxiii] This requires the RBI to introduce a disclosure regime that progresses from voluntary to eventually mandatory forms. By doing so, the central bank sends adequate policy signals for the banks to reorient their business prospects, adjust their leverage ratios, complete internal assessments and risk profile tests in order to determine the extent to which the bank’s assets are expected to be stranded. It must be noted that while India may follow the French model of introducing a law for climate-related disclosures, the implementation of French model would presuppose the existence strong regulatory institutions as well as a robust Monitoring, Reporting and Verification of Monetary support (‘MRV’) mechanism which acts as a nodal agency between various regulators to track the impact of green investments and formulate regulatory responses for course correction.[xxiv] The authors are of the view that under present situations, Indian bond market is still in its nascent stages and the domestic markets are yet to develop. While robust regulation is commendable, prescriptive methods may discourage green investments due to increased transaction and compliance costs which also act as a hindrance to growing investments.[xxv] Hence, India may take the example from the lead provided by Chinese regulators who have, over the course of six years provided sufficient time for the industry to adjust itself to the increased possibility of higher costs on carbon-intensive projects.

Monitoring, Reporting and Verification of the use and management of proceeds

The People’s Republic of China’s green bond market started after the promulgation of three essential national regulatory documents on green bonds, namely the People’s Bank of China (‘PBoC’) Announcement (2015) No. 39 (PBoC 2015a), the Guidelines on Green Bond Issuance by the National Development and Reform Commission (‘NDRC’) and the China Securities Regulatory Commission (‘CSRC’)’s Guiding Opinions for Supporting the Green Bonds. At present, the PRC’s green bond market is supervised by four government agencies, namely the PBoC, the NDRC, the CSRC, and the National Association for Financial Market Institutional Investors. The framework for regulating green bonds is based on the existing regulations employed to govern the issue of corporate bonds. During the lifetime of the green bond, further disclosure of information is required on three parameters: the use of funds, the progress of projects, and the realization of environmental benefits. Further, regulators of China’s green bond market have also moved towards increased oversight of external review and an accreditation scheme for verification organizations. The Green Bonds Principles require external reviewers to register with the newly established Green Bonds Standard Committee and to provide evidence of credentials such as relevant expertise, established internal governing procedures, clean legal record, professional liability insurance, etc. By volume, China represents the highest value of green bonds issued by jurisdiction amongst Asian economies and the second-largest green bond market in the world.[xxvi] However, the major key concern noticed by the authors is the divergence of definitions as to what qualifies as a green project within China’s domestic regulations and the international guidelines such as UNEP Finance Initiative and Global Reporting Initiative.[xxvii] For example, investments in construction of clean coal projects and retrofitting of old power plants are considered as eligible for issuance of green bonds while the same are not internationally recognized as green projects. However, in the draft 2020 revision to the Green Bonds catalogue issued in 2015, Chinese regulators are attempting to remove projects involving ‘clean fossil fuels’ from the list of projects eligible for green financing. Thus, the Chinese government is attempting to harmonize their taxonomy to sync with the globally acceptable standards with a view to reduce the ‘brown’ impact of its green projects.[xxviii]

One notable point for analysis is the initiative taken by the Stock Exchanges and Depositories located in China. They have published number of indices for green bonds, notable among which are the SSE Green Corporate Bond Index, China Green Bond Index, Green Securities Exchange Bond Index, China Bond among others. The introduction of these indices provides an objective means for investors to gauge the market and locate underperforming asset classes. [xxix]

Reducing borrowing costs and addressing market mismatches

High borrowing cost has been perhaps the most important challenge and our analysis indicates that it could be due to the asymmetric information. Therefore, developing a better information management system in India may help in reducing mismatches, borrowing costs and lead to efficient resource allocation in this segment.[xxx]

There exists a maturity mismatch when the issue of the entry of institutional investors in a bond market is considered. Long-term projects such as green infrastructure and renewable energy require sustained funding irrespective of low short-term returns. However from the investor’s perspective, i.e pension funds and insurance companies, insufficient data, lack of means to rate and label green bonds and absence of standard taxonomy dissuades investments in potentially risky portfolios. Traditionally, bond markets are reliant on bank loans which are reluctant to advance sufficient long-term loans due to short tenor of liability and capital adequacy requirements which hampers the development of infrastructure. Hence the immediate need is to lay down the taxonomy and introduce indices at stock exchange level which reduce transaction costs and allow more institutional investors to enter the green bond market.[xxxi] For insurers and pension funds, project size can be a significant barrier as they do not invest directly in small scale projects due to cost due diligence.[xxxii] ttracting institutional investors will require a further development of green bonds and other liquid financial instruments matching investors’ preferences.[xxxiii]

Outlining and developing a sustainability framework taxonomy

The Prudential Regulatory Authority (‘PRA’) of the Bank of England exercises the supervisory authority over the financial health of all financial services firms. The PRA is one of the foremost regulatory agencies in the world to provide guidelines for E&S Risk assessment and management to identify and approach climate-related financial risks. Banks and financial institutions coming under the PRA’s purview are now required to incorporate the results of climate stress-testing in their disclosures to allow the determination of ‘material exposure’.[xxxiv]  

ESG disclosure regulations and low-carbon benchmarks in the EU were finalized in 2019 regulation[xxxv], which are the initiatives under the EBA’s Sustainable Finance Action Plan. The plan requires banks to actively identify and manage their climate-related risks, and disclose their key metrics, starting from 2021. These measures are projected to reorient the allocating decisions that banks currently make in a manner consistent with the agenda of reducing carbon emissions. To bolster the existing regime of ESG disclosures, the EU has enacted the Sustainability Framework Taxonomy[xxxvi], an ambitious legislative venture which categorizes business practices across industries based on their environmental impact and sustainability. Th taxonomy aims to provide consistent and uniform demarcations to all stakeholders – regulators, lenders and borrowers – based on which the sustainability of a business can be estimated. It will consequently allow investors and lender banks to invest without the risk of greenwashing through and aid the gradual phasing into greener investment options.

Indian regulators have taken a proactive approach in regulating the financial markets; however, the lack of standardized definitions hinders both regulation and sustainable business practice. [xxxvii] Particularly, the development of sustainability framework taxonomy in the Indian context must be consistent with India’s climate goals for 2030, which are markedly different from the EU or UK goals. For example, coal accounts for nearly 50% of India’s energy mix. Hence, developing a taxonomy for each and every industry is a task that requires coordination of both regulators and industry players which requires considerable resource mobilization.[xxxviii]

Widening scope of Lenders’ Environmental Liability 

A strong Lenders’ Environmental Liability (‘LEL’) framework translates to holding banks and institutional investors jointly and severally liable for environmental damage caused by borrowers, thus incentivizing lenders to prefer green financing options to mitigate liability and in turn, encouraging companies to adopt cleaner business practices. A functional LEL must have the effect of lenders internalizing precautionary environmental duty of care by the way of detailed sustainability assessments of funded projects without undermining profitability.[xxxix]

Brazil’s environmental policy defines a polluter to include any entity directly or indirectly contributing to environmental pollution[xl] and allows lenders to be made liable for the entirety of environment recovery costs where they fail to take precautionary measures during and before disbursement of the loan.  It also requires public financial entities to make availability of credit ‘conditional upon verification of compliance with environmental norms.’[xli] Despite presence of a comprehensive legal framework, Brazil’s LEL suffered implementational shortcomings and was made airtight only through the Superior Court of Justice’s wide interpretation of ‘indirect polluter’ to include “anyone who finances for something to be done.”[xlii] The Indian legal system provides for liability for environmental damage to be extended to lenders upon breach of duty of care through reliance on legal concepts such as strict and absolute liability and the wide interpretation of the fundamental right to life to include right to clean environment by the apex court.[xliii] However, in absence of any legislation outlining the scope or extent of such liability, the effectiveness of these is limited by dependence on applicability and interpretation of precedents on a case-to-case basis. Thus, most lenders do not scrutinize or consider environmental consequences of a project as decisive factor while making financial decisions. For an effective LEL structure, it is necessary to couple well-defined regulations with proactive measures by the financial regulator to impose precautionary liability upon banks and institutional investors.

Given the demographic similarities to Brazil, India may consider integrating a defined LEL into its environmental legislations. Parallelly, the RBI may also introduce mandatory pre-lending environmental due diligence to be conducted by banks and over time, compulsorily require industry-wise minimum standards of sustainability to be complied with before approving loans to companies.

Concluding Comments

The interplay of incentives and liabilities is crucial for a market to adjust itself to the rapidly changing environmental circumstances. For long, the dominating thought is one of efficient markets which place ample confidence in an institution’s ability to correct itself and reach an optimum. However, in the absence of adequate regulatory scaffolding, no bank will be motivated to consider the long-term impact of its lending decisions. Banks in India still follow a top-down approach in terms of management strategy which places a burden of responsibility on those who run its boards. Board-level awareness and cognizance of environmental risks is essential to integrate adequate E&S risk assessment and management services. This involves the change of language in which business is conducted and most importantly, a sufficient level of consensus amongst industry players on what terms like ‘sustainable financing’ and ‘green projects’ mean. In short, a taxonomy which is both consistent and suitable to Indian conditions must be developed.  Further, India must scale its regulatory efforts by either forming a working group within the Reserve Bank of India comprising officials engaged in various regulatory bodies or a new regulatory body with a statutory mandate that can demand compliance from stakeholders with respect to exposure, potential risks and sustainability impact assessment of their portfolios. Regulatory certainty is most crucial for any emerging market and more so for green markets which involve high degree of operational uncertainty.


[i] Paris Agreement (Dec. 13, 2015), in UNFCCC, COP Report No. 21, Addenum, at 21, U.N. Doc. FCCC/CP/2015/10/Add,1 (Jan. 29, 2016)

[ii] Ulrich Volz, ‘Fostering Green Finance for Sustainable Development in Asia’ (2018) Asian Development Bank Institute Working paper No.814 <https://www.adb.org/publications/fostering-green-finance-sustainable-development-asia&gt; accessed 22 Mar 2021

[iii] Magdalena Ziolo; Beata Zofia Filipiak; Iwona Bąk; Katarzyna Cheba; Diana Mihaela Tîrca and Isabel Novo-Corti, ‘Finance, Sustainability and Negative Externalities. An Overview of the European Context’ (2019 ) 11  (15) Sustainability < https://www.mdpi.com/2071-1050/11/15/4249>&nbsp; accessed 22 March 2021

[iv] Rob Macquarie et.al, ‘Updated View of the Global Landscape of Climate Finance 2019’ (Climate Policy Initiative, 18 Dec 2020) < https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/Updated-View-on-the-2019-Global-Landscape-of-Climate-Finance-1.pdf>&nbsp; accessed 22 Mar 2021

[v] Cymroan Vikas et. al ‘Scaling SDG Finance in India’  (YES Global Institute, Nov 2017) < https://www.yesbank.in/pdf/scaling-sdg-finance-in-india> accessed on 22 Mar 2021

[vi] Elena Cigu et. al, ‘The Nexus between Financial Regulation and Green Sustainable Economy’  (2020) 12 (21) Sustainability < https://www.mdpi.com/2071-1050/12/21/8778/html&gt; accessed 22 March 2022

[vii]Securities and Exchange Board of India Circular No. CIR/IMD/DF/51/2017 (Issued on May 30, 2017).

[viii] David Craig. ‘Sustainable Finance starts with Data’ (World Economic Forum, 12 January 2020) < https://www.weforum.org/agenda/2020/01/sustainable-finance-starts-with-data/&gt; accessed 22 March 2020

[ix] Securities and Exchange Board of India Circular No. CIR/IMD/DF/51/2017 (Issued on May 30, 2017)

[x] Kumar and Prakash, ‘Examination of sustainability reporting practices in Indian banking sector’ (2019) 4 (2) AJSSR < https://ajssr.springeropen.com/track/pdf/10.1186/s41180-018-0022-2.pdf&gt; accessed 22 March 2021

[xi] Ibid.

[xii] Elena Cigu, Supra note 6

[xiii] G.N. Soutar, B. Ramaseshan, C.M. Molster, ‘Determinants of Pro-Environmental Consumer Purchase Behaviour: Some Australian Evidence’ (1994) Asia Pacific Advances in Consumer Research (vol. 1), 28-35

[xiv] Staff Report, ‘India is not making businesses disclose climate risks’ (Down To Earth, 05 June 2018), <https://www.downtoearth.org.in/news/climate-change/in-the-last-one-year-india-has-not-made-businesses-disclose-climate-risks-report-60765&gt; accessed 22 March 2021; Dr. Nina Seega et. al, ‘Sailing from different harbours: G20 approaches to implementing the recommendations of the Task Force on Climate-related Financial Disclosures’ (CISL, May 2018) <https://www.cisl.cam.ac.uk/resources/publication-pdfs/cisl-tcfd-report-2018.pdf&gt; accessed 22 March 2021

[xv] Reserve Bank of India Act 1947 (IN)

[xvi] Park, H., Kim, J.D ‘Transition towards green banking: role of financial regulators and financial institutions’ (2020) 5 (5) AJSSR < https://ajssr.springeropen.com/articles/10.1186/s41180-020-00034-3&gt; accessed 22 March 2021 

[xvii] Dikau, S. and U. Volz, ‘Central Banking, Climate Change and Green Finance’ (2018) Asian Development Bank Institute Working Paper No. 867, 4 <https://www.adb.org/publications/central-banking-climate-change-and-greenfinance>&nbsp; accessed 22 Mar 2021

[xviii] Schoenmaker, Dirk; Van Tilburg, Rens ‘What Role for Financial Supervisors in Addressing Environmental Risks?’ Comparative Economic Studies’ (2016)  58(3), 317–334

[xix] Reserve Bank of India, Master Directions, Priority Sector Lending- Targets and Classifications, RBI/FIDD/2020-21/72 (Issued on 04 September 2020)

[xx] Sarangi, G. P, ‘Green Energy Finance in India: Challenges and Solutions’ (2018) Asian Development Bank Institute Working Paper No. 863, 12 <https://www.adb.org/publications/green-energy-finance-india-challenges-and-solutions&gt; accessed 22 March, 2021

[xxi] Energy Transition for Green Growth Act (No. 992 of 2015) (FR)

[xxii] Susanna Rust, ‘ESG: France’s Article 173: Taking Stock’ (IPE Magazine, January 2019) <https://www.ipe.com/esg-frances-article-173-taking-stock/10028810.article&gt; accessed 22 March 2021

[xxiii]Dikau, S. and U. Volz, ‘Central Banking, Climate Change and Green Finance’ (n 13) 7.

[xxiv] Dave Steinbach et.al ‘Enhancing India’s readiness to access and deliver international climate finance’ (Shakti Sustainable Energy Foundation, 05 September 2014) <https://shaktifoundation.in/wp-content/uploads/2014/10/India-Climate-Finance-Readiness-FINAL-30914.pdf&gt; accessed 22 March 2021; Buchner, B., J. et.al ‘Monitoring and Tracking Long-Term Finance to Support Climate Action’ (2011) OECD/IEA Climate Change Expert Group Papers, No. 2011/03, 12 < http://www.oecd.org/env/cc/48073739.pdf&gt; accessed 22 March 2021

[xxv] Brandon Faske, ‘Turning Billions into (Green) Trillions: Tracking the Growth and Development of the Green Bond Market in China, France, India, and the United States'(2018) 31 Tul Envtl LJ 293, 300

[xxvi] Donovan Escalante et.al, ‘Green Bonds in China: The State and effectiveness of the market’ (Climate Policy Initiative, 10 June 2020) < https://www.climatepolicyinitiative.org/publication/green-bonds-in-china-the-state-and-effectiveness-of-the-market/&gt; accessed 21 March 2021

[xxvii] Zhang, H, ‘Regulating Green Bonds in the People’s Republic of China: Definitional Divergence and Implications for Policy Making’ (2020) Asian Development Bank Institute Working Paper No. 1072, 8 <https://www.adb.org/publications/regulating-green-bonds-prc-definitional-divergence-implications&gt; accessed 22 March 2021

[xxviii] Paul Davies et.al, ‘China Proposes Cutting Clean Coal From Revised Green Bond Standards’ (Lexology,03 June 2020) < https://www.lexology.com/library/detail.aspx?g=b5e90ea9-441e-4cd2-bf8c-8f00e3d313bf&gt; accessed 22 March 2021

[xxix] MA Jun et. al, ‘Green Bonds’ in Schipke, Alfred, Markus Rodlauer, and Zhang Longmei, (eds), The Future of China’s Bond Market. ( International Monetary Fund, 2019) 158

[xxx] Saurabh Ghosh et. al ‘Green Financing in India: Progress and Challenges’ (RBI Bulletin, 21 January 2021) < https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=20022&gt; accessed 22 March 2021

[xxxi] G20 Green Finance Study Group, ‘G20 Green Finance Synthesis Report’ (United Nations Environment Programme, 05 September 2016) <https://unepinquiry.org/wp-content/uploads/2016/09/Synthesis_Report_Full_EN.pdf&gt; accessed 22 March 2021

[xxxii] David Nelson and Brendan Pierpoint, ‘The Challenges of Institutional Investment in Renewable Energy’ (Climate Policy Initiative, March 2013) <https://www.climatepolicyinitiative.org/wp-content/uploads/2013/03/The-Challenge-of-Institutional-Investment-in-Renewable-Energy.pdf&gt; accessed 22 March 2021

[xxxiii] Ameli, N. et al, ‘Climate finance and disclosure for institutional investors: why transparency is not enough’ (2020) 160 Climatic Change565, 581.

[xxxiv] Prudential Regulation Authority, Enhancing Banks’ and Insurers’ Approaches to Managing the Financial Risks Arising from Climate Change, SS3/19:  April 2019.

[xxxv] Regulation 2019/2089 (EU) of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks [2019]  L 317/17

[xxxvi] Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 [2020] OJ L 198

[xxxvii] Shaktikanta Das, ‘Report on Trends and Progress of Banking in India 2019-20’ (Reserve Bank of India, 29 December 2020) <https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/0RTP2020_F3D078985540A4179B62B7734C7B445C9.PDF&gt; accessed 22 March 2021

[xxxviii] Sivanath Ramachandran and Sandeep Bhattacharya, ‘Defining Green Activities: What the new EU rules mean for India’ The Hindu Business Line (16 April, 2020) <‘https://www.thehindubusinessline.com/economy/policy/defining-green-activities-what-the-new-eu-rules-mean-for-india/article31356182.ece> accessed on 22 March 2021

[xxxix] ‘Lenders and Investors’ Liability: How much is too much?’ (UNEP Inquiry Working Paper, April, 2016) < http://unepinquiry.org/wp-content/uploads/2016/04/Lenders_and_Investors_Environmental_Liability.pdf&gt; accessed 22March 2021

[xl] National Environmental Policy Act 1981, Article 3, Item IV (Braz.)

[xli] Ibid, Article 12.

[xlii] Bianca Zambão, ‘Brazil’s Launch of Lender Environmental Liability as a Tool to Manage Environmental Impacts’ (2014) 18 U. Miami Int’l & Comp. L. Rev. 47

[xliii] M.C. Mehta v Union of India And Others [1991] SCR (1) 866, SCC (2) 353; Subhash Kumar v State of Bihar and others [1991] AIR 420, 1991 SCR (1) 5

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